The FINANCIAL — During the first five months of 2015 remittances inflow to Georgia amounted to USD 438,190,600, down from USD 570,578,700, or 23%, from the same period of the previous year. With USD 120 million, Russia is a country from which the largest volume has been reduced. It is followed by Greece – with USD 15.3 million, and Italy and Ukraine – USD 5.8 million per each country.
According to the latest issue, of the World Bank’s Migration and Development Brief, growth in global remittances, including those to developing countries, will slow sharply this year due to weak economic growth in Europe, deterioration of the Russian economy and the depreciation of the euro and Ruble.
The 2015 remittance growth rates are the slowest since the global financial crisis in 2008/09. Nonetheless, the number of international migrants is expected to exceed 250 million in 2015, and their savings and remittances are expected to continue to grow, according to World Bank.
The slowdown in the growth of remittances this year will affect most developing regions, in particular Europe and Central Asia where flows are expected to decline by 12.7 percent in 2015. The positive impact of an economic recovery in the U.S. will be partially offset by continued weakness in the Euro Area, the impact of lower oil prices on the Russian economy, the strengthening of the US dollar, and tighter immigration controls in many remittance source countries.
In line with the expected global economic recovery next year, the global flows of remittances are expected to accelerate by 4.1 percent in 2016, to reach an estimated USD 610 billion, rising to USD 636 billion in 2017. Remittance flows to developing countries are expected to recover in 2016 to reach USD 459 billion, rising to USD 479 billion in 2017.
The top five migrant destination countries continue to be the United States, Saudi Arabia, Germany, Russia and the United Arab Emirates (UAE). The top five remittance recipient countries, in terms of value of remittances, continue to be India, China, Philippines, Mexico and Nigeria.
Russian Federation, Greece, Italy, the USA, Turkey, Israel, Spain, Germany, the Ukraine, Azerbaijan, the UK and Kazakhstan are top countries sharing largest volume of money transfers to Georgia.
92.0 percent of the total money transfers from abroad came from 12 big donor countries, with the volume of transfers from of these countries each exceeding 1 million USD in May 2015. In May 2014 the share of these 12 countries constituted 93.6 percent of the total volume of money transfers.
Beside its dramatic reduction, Russia, with the largest number of Georgian immigrants, remains the leader by remittances to Georgia. During the first five months of 2015 USD 162, 825, 800 has been transferred from Russia; the sum was USD 282, 667, 530 during January-May 2014. Inflow from Greece amounted to USD 68,971,700 during the current year. The sum was USD 84,0232, 700 during five months of 2014. Georgians received USD 1.2 million less transfers from Spain this year. The volume summed up to USD 10,248,700 in 2015, down from USD 11,440,610 from 2014. Georgian immigrants in Ukraine managed to send just USD 8,395, 500 in 2015. The figure was USD 14,217,000 during the first five months of 2014.
Out of the 12 big donor countries, money transfers have increased from the USA, Turkey, Israel, Germany, Azerbaijan, the UK and Kazakhstan.
USD 8 million more has been transferred from the USA, totalling USD 38,745,100. Transfers from Turkey amounted to USD 29,225,000 in 2015. The figure was USD 23,972,000 during the first five months of 2014. From Israel, transfers totalled USD 11,654,600 in 2015, up from USD 8,487,700 from 2014. Insignificant growth has been shown from Germany which amounted to USD 9,970,900; just over USD 850, 300 more than in 2014. Transfers from Azerbaijan came to USD 6,393,800, which is slightly more than the figure of the previous year. Slight increase of remittances has been shown from the UK. Money transfers from the UK to Georgia amounted to USD 5,831,700 during January-May 2015, up from USD 5,769,200 from the previous year. USD 44,222,900 has been transferred from Italy during the first five months of 2015, up from the USD 50,009,900 of 2014. As for Kazakhstan, the sum was 2,208,900 in 2015, up from USD 2,040,800 from the previous year.
In a special analysis on leveraging migration for financing development, the Brief estimates that as much as $100 billion in migrant savings could be raised annually by developing countries by reducing remittance costs and migrant recruitment costs, and mobilizing diaspora savings and philanthropic contributions from migrants.
“The moderation in the growth of remittances will be hard on many poor people. The affected countries may have to consider creative ways of smoothing the shock. Fortunately, migration and remittances can be leveraged for innovative financing,” said Dilip Ratha, Lead Economist, Migration and Remittances, at the World Bank’s Development Prospects Group and Head of the Global Knowledge Partnership on Migration and Development (KNOMAD). “As to long-term financing needs for the Post-2015 Development Goals, I would love to see a bullet train system in India, an international airport in Nigeria, another Suez Canal in Egypt, a hydro-project in Pakistan, a community development program in the Philippines, all financed by mobilizing the power of remittances and diaspora savings.”
According to the Brief, remittances to developing countries in the Europe and Central Asia region will continue to decline sharply for a second consecutive year in 2015. Inflows are expected to total $42 million this year, a decrease of 12.7 percent over 2014 when remittances declined by 6.3 percent. The economic contraction in Russia, a major remittance source country, has resulted in migrant job losses while the depreciation of the Ruble has reduced the real incomes of migrant workers in Russia and reduced the value of remittances in US dollar terms. Central Asian countries are the hardest hit, due to their heavy dependency on remittances from Russia. In 2014, remittances to Ukraine contracted by 27 percent, to Uzbekistan by 16 percent, Armenia 11 percent and Tajikistan 8 percent, with dramatic declines occurring in the fourth quarter of the year. Tajikistan is the world’s most remittance dependent country, with remittances constituting 49 percent of GDP in 2013, and for Armenia remittances were 21 percent of GDP. Inflows to the region are expected to recover to USD 45 billion in 2016 and $48 billion in 2017.